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Resentment rising in London against foreign property buyers

Richard Warren

BIO

Richard Warren lives in London where he writes about property for the South China Morning Post, London Evening Standard and Financial Times. He has been a specialist property researcher for the BBC. Previously based in Hong Kong, he has written for the Wall Street Journal Asia and Hong Kong Tatler.

Most sales launches for London housing developments happen in Hong Kong and other Asian centres these days. That Londoners are getting first bite of the cherry for 800 Battersea Power Station flats released this month pleases many of the city's residents, because their resentment of overseas home buyers is growing.

Three-quarters of brand-new homes and half of second-hand homes sold in prime central London during the first six months of 2012 were bought by foreigners, Savills reports. Their presence is felt elsewhere in the British capital too. In Kew, south west London, one estate agency has signs in its windows written in Russian.

Immigrant demand for rental homes has helped push up rents by 26 per cent in central areas since spring 2009, Knight Frank research shows. According to the 2011 census published last month, one quarter of people living in London were born outside of Britain.

Left-wing politicians want wealthy, foreign home-owners taxed more heavily. Right-wing politicians want immigration restricted more tightly. Priced Out, a group which campaigns for people unable to afford their own home, says overseas property investors squeeze Londoners out of the housing market.

What upsets Londoners most are wealthy foreigners who occupy their homes for only a few months or weeks each year. Pockets of Belgravia and Knightsbridge where levels of foreign home ownership are among London's highest have been dubbed “ghost” areas, because so few homes have room lights glowing at night.

And yet, a vibrant business sector has emerged to service overseas home buyers – many developers, estate agents, buyers agents, solicitors, interior decorators, managing agents, mortgage lenders, furniture-makers, artists, landlords and housing security specialists owe much, even most, of their living to helping accommodate foreigners in the city. Whether Londoners like foreign investors depends largely on which side of the estate agent's table they sit.